BREXIT/ Italy to the collapse: it's all in the Asian '97-98 crisis?

The largely dreaded Brexit has arrived, and the consequences are apparently so immense and unpredictable that they were neither seen nor anticipated. FRANCESCO SISCI

Pubblicazione: giovedì 30 giugno 2016

The largely dreaded Brexit has arrived, and the consequences are apparently so immense and unpredictable that they were neither seen nor anticipated. Neither the EU nor the Britons had prepared a plan B, that is, what they would’ve effectively done if the referendum had chosen to leave the Union.

Such is clear from the first frantic reactions of the European Commission President Jean-Claude Junker, who, in substance, said to the British: “and now get the hell off of the EU ASAP” and from the British themselves, who, in the few hours following the results, garnered two million signatures to vote again, while the Scottish formally announced they would stay with the EU and leave the UK instead.

However, many in the world don’t worry as much about the destruction of the Kingdom, which, through many difficulties was united for centuries, but instead, of the break of the more convoluted EU and its currency, the Euro. It could create global financial crises and worsen social and political tensions inside and out of the fleeting confines of the Union.

Many financiers expect this and are betting their money against the European currency; beginning from the speculator/philosopher George Soros. The perspective for Europe could to become much like Asia during its 1997-98 financial crisis. At the time, the fall of the Thai Baht gave rise to a series of vast social upheavals that ended regimes and widespread government practices in the region, from Japan and South Korea to Indonesia and India. Only China resisted that financial storm, but only because its currency wasn’t freely tradable.

Today, the UK’s exit from the EU is much more critical than the fall of the Baht in 1997 and the global clout of the Euro area is much stronger than that of the Asian economies 20 years ago. Then, only the Japanese Yen was a giant; the others were only financial dwarfs. So, something much worse than the 2008 crises (started in the USA) could occur now, while the old 2008 wounds have not yet totally healed.

A prompt remedy is required before the disaster spreads out of control. The immense confusion of these times has many fathers, and history books will certainly produce thousands of volumes on the subject. Here it worth noticing briefly that faulty are not solely those who roughly used the delicate cudgel of democracy, but also of the many bureaucrats who, for years turned a deaf ear to popular cries for reform of the Union. Unelected demagogues and self-righteous mandarins are mirror images: there are those who stir the lowest popular moods and those who inhabit ivory towers and refuse to listen. Missing in between is real democracy and the ability to drive the continent through gigantic and impervious transformations.

The, today, the prospective isn’t rosy: will those who failed in normal times succeed in extraordinary ones? It’s difficult, but it is more than possible: it is essential to the survival of all.